Physician Practices Make Significant Economic Impact on NJ Economy
LAWRENCEVILLE, NJ – Employment in medical practices in New Jersey grew steadily through much of the past decade despite two recessions and contributes significantly to the state’s economy, according to an Edward J. Bloustein School of Planning and Public Policy study.
The report estimates there are approximately 9,100 private practice physicians’ offices employing nearly 70,000 medical professionals and other staff in NJ as of 2009. In addition to providing vital health care services, the ongoing annual expenditures associated with operating private practices result in significant annual economic and fiscal benefits to the state’s economy. This occurs directly through the employment of staff and the purchase of materials, equipment and services, and indirectly, through the multiplier, or ripple effects, of these expenditures throughout the general economy.
The study finds the industry directly employs more people than comparable professional and other industries including offices of lawyers, the accounting and engineering sectors, and the amusement and recreation sector.
Estimates of the direct and indirect contributions of physicians’ practices in New Jersey to the state economy include:
- Nearly 113,000 jobs
- $7.3 billion in annual income
- $10.7 billion in annual gross domestic product for the state
- $334 million in annual state tax revenue
- $353 million in annual local tax revenue
The sector’s economic growth has been significantly stronger than that of the state as a whole, and the industry was not strongly affected by the deep job losses of the 2007-2009 recession. To the contrary, while total state employment declined by almost 3% from 2001 to 2009, employment by physicians’ offices grew by over 20% (about 12,000 jobs) and total annual wages in the industry grew by almost 50%.
This strong performance is consistent with the private healthcare sector as a whole, which saw employment growth of approximately 23% at state and national levels over the same period. As of 2009, physicians’ offices in New Jersey directly employed nearly 70,000 people with a total payroll of $5.5 billion.
“The annual economic contributions of medical practices to the New Jersey economy are significant,” said Dr. Joseph J. Seneca of Rutgers’ Edward J. Bloustein School of Planning and Public Policy, a co-author of the study. “In addition, the broader benefits resulting from effective health care and treatment by physicians and their offices, such as reduced morbidity and mortality, improved quality of life, and decreased pain and suffering are undoubtedly enormous and should be properly added to our estimates of economic and fiscal impacts,” he added.
The complete study can be found here: http://www.policy.rutgers.edu/reports/other/MSNJ_FINAL_REPORT_10May2011.pdf.
A special session to present these findings will be held at the MSNJ Annual Meeting on Friday, May 13 at 4:00 pm at the Hyatt Regency New Brunswick.